Egypt`s Sisi inaugurates `new Suez Canal`

Egyptian President Abdel Fattah al-Sisi staged a lavish ceremony Thursday to unveil a "new" Suez Canal, seeking to boost the country`s economy and international standing by expanding the vital waterway.

Cairo: Egyptian President Abdel Fattah al-Sisi staged a lavish ceremony Thursday to unveil a "new" Suez Canal, seeking to boost the country`s economy and international standing by expanding the vital waterway.

Sisi, sporting ceremonial military uniform, arrived on board an historic yacht leading a naval flotilla as fighter planes and helicopters flew overhead.

Security was tight, with the Islamic State jihadist group`s threat to execute a Croatian kidnapped near Cairo threatening to overshadow the celebrations, showcased by authorities as proof the country is safe.

The event in the port city of Ismailiya attended by several heads of state, including French President Francois Hollande, comes two years after then army chief Sisi overthrew his Islamist predecessor.

Mohamed Morsi`s ouster unleashed a deadly crackdown on Islamists, and a jihadist insurgency has since killed hundreds of soldiers east of the Suez Canal.

Croatian Foreign Minister Vesna Pusic was due in Cairo on Thursday to try to secure Salopek`s release. Sisi, elected last year on a promise to strengthen security and revive a dilapidated economy, broke ground on the canal project last August.

Initial estimates suggested the new route would take up to three years to build, but Sisi set an ambitious target of 12 months.

It has been touted as a landmark achievement, rivalling the digging of the original 192-kilometre (119-mile) canal, which opened in 1869 after almost a decade of work.

The new section, built at a cost of $9 billion (7.9 billion euros) and funded entirely by Egyptian investors, runs part of the way alongside the existing canal connecting the Red Sea and the Mediterranean.

"It`s an achievement for the people who managed to fund it as a national project and accomplished it through perseverance and hard work," Sisi`s office has said.

It involved 37 kilometres of dry digging, creating what is effectively a "second lane", and widening and deepening another 35 kilometres of the existing canal.

It will cut the waiting period for vessels from 18 hours to 11.

By 2023, the number of ships using the canal will increase to 97 per day from 49 now, according to government projections.

Officials hope the new waterway will more than double Suez earnings from $5.3 billion expected at the end of 2015 to $13.2 billion in 2023.

Analysts were sceptical over the targets.

"The first priority for shipowners and traders is to cut costs, not speed. The trend in recent years has been for ships to travel at lower-than-normal speeds just to... save on their fuel bills," said Ralph Leszczynski, research head at Italian shipbrokers Banchero Costa.Sisi opened the inauguration ceremony by leading the naval procession. He later changed into a business suit to greet foreign dignitaries attending the event.

Those present were Palestinian president Mahmud Abbas, King Abdullah of Jordan, Yemen`s exiled President Abedrabbo Mansour Hadi and Kuwaiti Emir Sheikh Sabah al-Ahmad Al-Sabah among hundreds of others.

Newly acquired French Rafale warplanes and US F-16s, delivered just last week, participated in the fly-past.

Banners reading "New Suez Canal: Egypt`s Gift to the World" and "The Egyptian Miracle," as well as hundreds of national flags, graced the streets of Cairo and Ismailiya.

Dozens of buses ferried invitees to the site of the ceremony as security forces deployed in Ismailiya.

Waving the Egyptian tricolor, a crowd gathered at Cairo`s Tahrir Square -- epicentre of protests that ousted both Morsi and his predecessor Hosni Mubarak.

"On June 30 (2013) we changed the course of history; today we are changing the geography of the world," said jubilant tour operator Ibrahim el-Khatab, referring to the day when millions protested against Morsi.

The waterway is a cornerstone for Sisi to boost his regime`s legitimacy after a deadly crackdown on dissent.

In revenge, militants have killed hundreds of policemen and soldiers, mostly in the Sinai Peninsula that lies between Israel, the Gaza Strip and the Suez Canal.

Amr Adly, of the Carnegie Middle East Center, said that "since Morsi`s ouster, the new regime is engaged in a political conflict to prove its legitimacy inside and outside Egypt.

"The ability to accomplish such an economic project is part of cementing this legitimacy."

The waterway is part of a comprehensive project to develop the area adjacent to the canal into an industrial hub.

Around one million jobs are expected to be created over the next 15 years, Suez Canal Authority chief Mahob Mameesh said last week.